Diversification Saves TSE from Global Turbulence

Thursday, 14 May 2020


Dr. Ali Sahraee, Tehran Stock Exchange (TSE)”s CEO had an interview with Al-Alam TV news channel.

In an interview with Al-Alam channel, TSE’s CEO discussed about several issues, including the Exchange’s growth story in the past months despite severe international limitations, national interest in the capital market investment, privatization accomplishment in Iran and the viewpoints about the market’s coming days.

Dr. Sahraee stated that some geopolitical developments in the region since the beginning of 2020 helped the investors find more confidence in the stability of local policies; the Iranian government also provided greater support to the capital market than ever before. All these, besides TSE’s valuable diversification of the listed sectors buffered the strain on the market, levied by the global devaluation of commodities, and the hassles of the pandemic, while most of the regional bourses have been under great pressure due to their limited list of sectors in the past couple of months.

Oil prices definitely affect the economy in a petro-exporting country like Iran, as well as Tehran Stock Exchange, as a part of it; however, some of our largest listed companies are not selling crude oil, but do the processing and make various petrochemical products based on a spread, which are less touched by the current decline.

“The market’s infrastructure and local developments have eased public access to the capital market, as there are currently around 2000 trading access points nation-wide and the retail investors are provided with the on-line trading facilities”, stressed Dr. Sahraee, and added that each listed company is required to publish at least 16 reports to the public on a unique platform, increasing market’s transparency and improving its credibility unprecedently.

The stock exchange performance in Iran dates back to more than 52 years ago, and since more than a decade ago, with a restructuring in the capital market, the industry is doing its role to help accomplish the privatization plan. Some of the largest state-owned companies are more transparent now and raise their needed funds via Tehran Stock Exchange, and this allows the private sector to have a bigger share in running the national economy. The Iranian government is planning to issue three ETFs on 20 percent discount by the listed companies in the banking/insurance, petrochemical and auto-manufacturing/metal sectors in near future; the ownership of funds’ constituent companies will be also transferred to the public via a direct ownership mechanism in a year.

The new Coronavirus outbreak disrupted many presumably stable trends, and it is not very easy to estimate the future. The countries have taken new policies limiting businesses from manufacturing to transport and leisure sectors, though there are those finding silver lining in the pandemic. Also, the social distancing is gradually allowing companies’ reappearance. In our market, those with exporting potentials will have brighter days waiting once the situation is getting normal.

Tehran Stock Exchange is definitely an untouched market with very exiting return rates, and at the same time tax incentives for foreign investors. Each foreigner, either individuals or an institution may apply for a trading license by our member brokerage firms, and trade like a local investor, and enjoy the legal protections of their capital and rights.

Related Link: https://www.ifb.ir/News.aspx?id=92&lang=enhttps://tse.ir/en/news/newsPages/news_N56241.html